(Genesee & Wyoming issued the following news release on May 3.)
GREENWICH, Conn. — Genesee & Wyoming Inc. (GWI) reported today that net income in the first quarter of 2004 increased 71.1% to $9.5 million, compared to net income of $5.5 million in the first quarter of 2003. GWI’s diluted earnings per share in the first quarter of 2004 increased 66.7% to $0.35 with 27.3 million shares outstanding, compared to diluted earnings per share of $0.21 with 26.6 million shares outstanding in the first quarter of 2003.
In the first quarter of 2004, GWI’s North American revenue increased 23.0% to $72.4 million compared to $58.9 million in the first quarter of 2003. Of this $13.5 million increase in revenue, $7.6 million was same-railroad growth and $5.9 million was from the acquisition of rail lines from Georgia-Pacific Corp. The growth in same-railroad revenue was led by an increase of $3.4 million in the Canada Region due primarily to strong shipments of winter wheat and a strengthening Canadian dollar, an increase of $1.5 million in the New York-Pennsylvania Region due to improving metals and autos shipments, and an increase of $1.2 million in the Rail Link Region due to several new customer contracts, including a contract to operate a terminal in Savannah, Georgia for CSX Corp.
North American operating income was $11.6 million in the first quarter of 2004, a 44.7% increase over $8.0 million of operating income in the first quarter of 2003. GWI’s North American operating ratio was 84.0% in the first quarter of 2004, a 2.4% improvement over an operating ratio of 86.4% in the first quarter of 2003.
In Australia, ARG’s revenue increased 54.3% to US$82.4 million in the first quarter of 2004, compared with US$53.4 million in the first quarter of 2003. This US$29.0 million increase in revenue was composed of $14.5 million in grain, US$4.9 million in other ores and minerals, US$4.0 million in iron ores and US$5.6 million in all other revenues. In Australian dollars, ARG’s revenue increased 20.0% in the first quarter of 2004 compared with the first quarter of 2003.
ARG’s operating income in the first quarter of 2004 increased 46.3% to US$17.6 million, compared with operating income of US$12.1 million in the first quarter of 2003. ARG’s operating ratio was 78.6% in the first quarter of 2004, compared with 77.4% in the first quarter of 2003. Equity income from ARG in the first quarter of 2004 was US$3.7 million, an 85.8% increase over equity income of US$2.0 in the first quarter of 2003. In comparing the first quarter of 2004 with the first quarter of 2003, the Australian dollar appreciated 28.6%.
For the three months ended March 31, 2004, GWI’s North American operations generated Free Cash Flow of $12.8 million (defined as Cash from Operations of $18.0 million less Cash used in Investing of $5.2 million) compared with $12.2 million of Free Cash Flow (defined as Cash from Operations of $14.0 million less Cash used in Investing of $1.9 million) in the first quarter of 2003. See the attached schedule for a description and discussion of Free Cash Flow.
Mortimer B. Fuller III, Chairman and Chief Executive Officer of GWI, commented, “Despite severe winter weather that created difficult operating environments for our Canada, New York-Pennsylvania and Oregon Regions, we achieved excellent first quarter results due to a general improvement in economic conditions. Particularly noteworthy was the improvement in metals and auto shipments in our New York-Pennsylvania Region as well as the successful start-up of the Georgia-Pacific railroads, where traffic has been ahead of our expectations.”
Mr. Fuller continued, “Grain shipments in Australia have been moving smoothly and we expect continued strength in the coming months. With our first quarter Australian earnings increasing 86% and our first quarter North American earnings increasing 49%, we are pleased with the balanced growth in our business and remain optimistic in our 2004 outlook.”
As previously announced, GWI’s conference call to discuss financial results for the first quarter will be held today at 11:00AM (Eastern Time). The dial-in number for the teleconference is (888) 428-4479 or the call may be accessed live over the Internet (listen only) directly at http://www.firstcallevents.com/service/ajwz405690973gf12.html or via the Investors tab of Genesee & Wyoming’s website (www.gwrr.com). An audio replay of the conference call will be accessible via the Investors tab of Genesee & Wyoming’s website (www.gwrr.com) starting this afternoon.
GWI is a leading operator of short line and regional freight railroads in the United States, Canada, Mexico, Australia and Bolivia. The Company operates over 8,100 miles of owned and leased track and more than 3,000 additional miles under track access arrangements.